Shipping to cost more

The increased cost of shipping cause by the EU Sulphur Directive, is finally making the headlines. Letters and articles are appearing in national newspapers pointing out that in the absence of any derogation from this directive, which is due to bite in 2015, the costs of operating ships in the European Emission Control Area will rise substantially.

Ship owners have elected not to oppose the measures, merely to point out their likely consequences.

It is unclear whether, at any time, the regulators in Brussels considered the true costs of these regulations, along with the practicability of forcing the shipping industry to embrace technology which is still in an early stage of development.

The three “choices” facing the industry are: very much more expensive gas oil with special additives, using LNG, or the use of scrubbers. All the shipping industry can now hope for is a “level playing field” as the new regulations come into force and some sympathetic understanding about the timescale and the possibility that some ships fitted with scrubbers are in fact operating prototype machinery.

Short sea ferry operators, who carry both passengers and freight, have concerns that there will be a modal freight shift from their ships, when freight costs increase due to the new measures.

Evidence of this will be seen in the North Sea. For the first time in more than 150 years, there will be no ferry link between southern England and Scandinavia, with DFDS ceasing to operate its service between Harwich and Esbjerg, due to the effect of fuel costs. The consequences will be an immediate increase in the amount of truck-miles, as freight hauliers from southern England drive to Immingham to use the services to Gothenburg, Sweden and Esbjerg, Denmark.